Business travel is often a vital part of a company's operational requirements. It can also become very expensive. Managing expenses that can easily get out of control requires good policies and guidelines. Employees need parameters as to what can and can't be expensed as well as limits on airfare and hotel spending. With policies in place, managers can achieve better oversight before travel even begins.

Housing Parameters

If you don't say otherwise, an employee might go for the nicest accommodations available. After all, he is leaving home to undertake company business--why shouldn't he enjoy the best? You can keep your employees comfortable and productive by specifying hotel types such as mid-level business hotel chains ideally in the $89 to $149 per night range. While you don't want to be too tight, given that some cities have higher hotel costs than others, there's nothing wrong with setting an expectation of a reasonably priced business hotel. Many companies give a list of preferred hotel chains. Often, these chains cater to business travelers and include free wireless Internet and light breakfasts in the room price.

Meal Costs

Employees doing overnight travel or longer should expect meal reimbursement, but there are reasonable spending limits. Many businesses have guidelines for how much an employee can spend per meal. Allow your employees to have a nice dinner, but there's nothing wrong with saying that $25 per person is the limit. Similarly, both for costs and sometimes ethical and moral reasons, companies refuse to reimburse alcohol in employee meals. Some companies take it a step further and consider alcohol at lunch a violation of human resources policy and a liability. Also, employees traveling during the course of a business day but without an overnight stay should not expect meals on the company unless you pre-authorize them.

Entertainment

Entertaining clients and sales prospects is a legitimate cost of doing business. In many industries, going out for drinks or dinner is part of how business gets done. Some companies also comp tickets and travel for their clients. However, without supervision, these costs can easily get out of control. You should establish clear policies about buying meals and drinks when traveling, including guidelines on how much can be spent per person and what venues your company deems inappropriate--such as strip clubs or casinos.

Airline Tickets

Airfare can be one of the most controlled expenses. Purchasing tickets early, taking flights with layovers and going with the airline that has the lowest fare instead of favoring a particular airline can produce significant cost savings. Employees booking their own airfare need to know your expectations for how to buy their tickets. You can exercise oversight by requiring employees to get managerial approval before making the purchase. Some managers require employees to print out a list of several airfares for the route from an online discount travel website to see that employees are selecting the most appropriate fares.

Comprehensive Oversight

To streamline the process, take the burden off employees and achieve stronger cost oversight, companies often elect to centralize their travel bookings. You have two options for this--bring it in-house or use a business travel agency. Having one or two people in-house who arrange all the airfares, hotels and rental cars keeps things under managers' close supervision. If that is too burdensome or a poor use of your employees' time, there are travel agencies that specialize in helping companies find the best deals for their business travel. Before making purchases, the agency emails the appropriate manager for authorization. In some cases, companies stand to do better relying on the bargain hunting expertise of professionals.

About the Author

Eric Feigenbaum started his career in print journalism, becoming editor-in-chief of "The Daily" of the University of Washington during college and afterward working at two major newspapers. He later did many print and Web projects including re-brandings for major companies and catalog production.